Final Settlements Reached in "Golden Goose" Wall Street Insider Trading Case
The Securities and Exchange Commission today announced that on May 14, 2013, the Honorable Lorna G. Schofield, United States District Judge for the Southern District of New York, entered final judgments against defendants Jamil Bouchareb, Daniel Corbin and Corbin’s companies, Corbin Investment Holdings, LLC and Augustus Management LLC. These are the last remaining defendants in a Commission case alleging widespread insider trading. The Commission’s case alleged the defendants traded in 11 to 12 corporate transactions based on inside information obtained from Matthew Devlin, a former Lehman Brothers, Inc. representative, who had misappropriated the confidential information from his wife, a partner in a public relations firm working on the deals. Because the inside information was valuable, Bouchareb and Corbin referred to Devlin’s wife as the "golden goose." A judgment against defendant Matthew Devlin was previously entered by the Court.
Bouchareb and Corbin agreed to pay a total of over $1.2 million in disgorgement and prejudgment interest to settle the Commission’s charges. The final judgments against Bouchareb, Corbin and Corbin’s companies permanently enjoin them from violating antifraud provisions Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rules 10b-5 and 14e-3. Bouchareb was ordered to pay disgorgement of $921,082 and prejudgment interest of $127,216. Corbin was ordered to pay disgorgement of $164,515.50 and prejudgment interest of $26,164.83. Bouchareb’s and Corbin’s disgorgement includes the entities’ trading profits. Bouchareb’s disgorgement also includes profits generated by his parents’ trading and trading profits generated by his girlfriend, relief defendant Maria Checa and her entity, relief defendant Checa International, Inc. Corbin’s disgorgement includes trading profits generated by his father, relief defendant Lee Corbin.
Devlin was permanently enjoined from violating Sections 10(b) and 14(e) of the Exchange Act and Exchange Act Rules 10b-5 and 14e-3 in a judgment entered on October 19, 2012. In a related administrative proceeding, the Commission barred Devlin from associating with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent, and barred Devlin from participating in any offering of a penny stock. (In the Matter of Matthew C. Devlin, Administrative Proceeding File No. 3-15315, May 6, 2013).
Bouchareb, Corbin and Devlin also pleaded guilty in parallel criminal cases brought by the U.S. Attorney’s Office for the Southern District of New York. Bouchareb was sentenced to 30 months’ imprisonment followed by two years of supervised release and ordered to pay a $20,000 fine and forfeit $1,582,125. Corbin was sentenced to serve six months in prison followed by two years of supervised release and ordered to forfeit $1 million. Based on Devlin’s cooperation with the criminal authorities, the court sentenced Devlin to three years’ probation and ordered him to pay a $10,000 fine and forfeit his gains of $23,000.
In prior settlements, the four other defendants in the case agreed to be enjoined from violating the antifraud provisions and pay over $1.3 million in disgorgement, prejudgment interest and civil penalties. The Commission’s relief included permanent industry bars and a forthwith suspension from appearing or practicing before the Commission pursuant to Rule 102(e)(2) of the Commission’s Rules of Practice. Two of these defendants also had pleaded guilty in parallel criminal cases.
The Commission acknowledges the assistance and cooperation of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation. The Commission also thanks the Financial Industry Regulatory Authority and the Options Regulatory Surveillance Authority.
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